June’s Eminent Domain Ballot Battle Is All About Rent Control

This June’s ballot duel between rival initiatives that each claim to restrict the ability of local government to seize public property will be all about rent control.

A brief clause in Proposition 98, sponsored by the Howard Jarvis Taxpayers Association, prohibits “limiting the price a private owner may charge another person to purchase, occupy or use his or her real property” which effectively repeals rent control in California.The repeal would be phased in as units become vacant.

“Without dealing with sales and lease price regulations we think government would start pursuing some of those more aggressively if eminent domain powers were restricted,’ said Jon Coupal, president of the Howard Jarvis group, which spent more than $2 million to place Proposition 98 on the ballot.

Eminent domain is when the government takes private land, sometimes without compensation, for a public purpose such as a park or a school.

Sometimes, however, a local government – usually a redevelopment agency – takes the land and conveys it to another private entity to create, for example, shopping center or auto mall both of which generate large amounts of sales tax revenue for localities.

Proposition 98 would ban seizing private land and giving to another private entity.

Squaring off against Coupal and his team are redevelopment agencies and the League of Cities, which oppose Proposition 98’s prohibition against government seizure of private property for other private use. They’ve spent more than $2 million as well to place Proposition 99 on the ballot. They claim it is the better reform although it appears to largely maintain the status quo.

“It’s the real versus the real steal,” Coupal says comparing his initiative to Proposition 99. See www.yesprop98.com for more information.

Proposition 98’s detractors say the rent control provision was added only as a lure to win financial backing from the state’s landlords. That hasn’t worked so far.

The California Apartment Association is neutral on Proposition 98 although Coupal says some local chapters support it.

Nor is the association likely to be looking forward to the upcoming campaign, which will focus on rent control.

Focus groups aren’t needed to recognize the threat of being forced out of one’s residence by a greedy landlord jacking up rent on some fixed-income senior is a more compelling message than trying to explain the intricacies of eminent domain.

In a foretaste of what’s to come, the website for Proposition 99, www.eminentdomainreform.com, offers the following description of Proposition 98 beneath a headline of The Hidden Agenda Scheme:

“Wealthy landlords spent millions to get Prop 98 on the ballot to eliminate rent control and other important renter protections like the fair return of deposits.98 could also stop future water projects, destroy local land use planning, erode environmental protections and lead to higher taxpayer costs.”

Coupal counters that Proposition 99 was put on the ballot “solely to take away property rights.” Coupal says part of the purpose of Proposition 99 being on the ballot is to confuse voters, a common ballot strategy that has been used to good effect in previous lections.The rival prescription drug measures on the November 2005 ballot, for example.

As additional insurance, Proposition 99 contains a poison pill provision so that if both measures pass and Proposition 99 gets more votes, it wipes out the provisions of Proposition 98.

Turnout is expected to be low in June which means more voters will be older, white, wealthier and generally conservative.

Even so, its unlikely either measure will pass in part because of the voter confusion Proposition 99 creates and the theme of landlords exploiting renters.

That confusion could be compounded because the previous Propositions 98 and 99 are part of government and public policy parlance. Prop 98 crested the intricate series of formulas that determines the state’s contribution to public schools. Proposition 99 increased taxes on cigarettes to pay for a variety of smoking cessation and other health programs.

Finally, history does not favor Proposition 98.A San Jose Mercury News review found that only nine of the 107 initiatives that appeared on the California ballot since 1998 passed when opponents spent at least $1 million. Proposition 99 will spend that amount – and then some.

And, the Mercury News notes, five of the nine that won outspent their opponents two to one, something backers of Proposition 98 will be unlikely to do.